Grandma Hanson set a trust in DE with DE company while she was a resident of PA.
As the settlor, she had certain powers over the trust.
Grandma Hanson moved to FL. While in FL, will was executed. On that same day, Grandma Hanson made changes to the trust redistributing $400k to Hanson (grandchildren) instead of Denckla and Stewart (sisters).
Denckla and Stewart brought suit in FL claiming that the power of appointment over the $400k appointed to Hanson was not "effectively exercised" and that the money should pass to them.
FL court ruled for Denckla and Stewart.
After the onset of litigation in FL but before the judgment, the executrix filed suit in DE to determine who was entitled to participate in the trust assets in DE. DE said the power of appointment was good, so money should go to Hanson.
FL Supreme Court said the trust was invalid because the settlor had reserved too much power over the trustee and that the power of appointment was not effective to pass the property. They reversed the DE decision that there was no jurisdiction over the trust companies.
Hanson appealed to SCOTUS.
Procedural History:
FL courts ruled for Denckla.
DE courts ruled for Hanson.
FL Supreme Court ruled for Denckla.
SCOTUS rules for Hanson.
Issues:
How can a forum state gain jurisdiction over an out of state nonresident whose activities in the forum state are limited to unilateral activity relating to the defendant?
Holding/Rule:
A forum state can only gain jurisdiction over an out of state corporation if that corporation has "minimal contacts" with that forum state.
It is essential that there be some act by which the defendant "purposely avails" itself of the privilege of conducting activities in the state, thus invoking the benefits and protections of its laws, in order for the minimum contacts requirement for jurisdiction to be met.
Reasoning:
The defendant trust company had no office in FL, transacts no business there, and has no trust assets held or administered in FL. There is no solicitation of business in FL in person or by mail.
The first relationship FL had to the agreement was when the settlor became domiciled there after the formation of the trust.
The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum state.
FL does not acquire that jurisdiction by being the "center of gravity" of the controversy or the most convenient location for litigation.
Dissent:
FL should have had jurisdiction because the will was administered in FL, and the state had an interest in the underlying transaction. FL met the "minimum contacts" requirement.
Notes:
Ms. Donner, living in PA, creates a trust in DE
Later moved to FL and received income from the trust
Later signed new documents and will in FL
Now, family fighting over $400k
FL courts decided the case, which is being challenged
Issue was that she made appointments in addition to her will about where the trust money should go
Best place to litigate would be in FL if we are going for judicial efficiency
